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BNP Paribas, Euroclear unveil joint tri-party collateral management arrangements

BNP Paribas Securities Services and Euroclear Bank have introduced their joint tri-party collateral management arrangements through Euroclear’s Collateral Highway.

The program will allow mutual clients to access securities held at BNP Paribas Securities Services as collateral for tri-party operations conducted by Euroclear Bank, claims the French lender.

In 2012, both firms inked a collaboration agreement to develop the joint initiative to support clients in sourcing securities to meet their growing collateral needs, amid stringent risk management practices and new regulation.

Euroclear Bank chairman Frederic Hannequart said, "By joining forces, we alleviate one of the challenges of collateral fragmentation by making the transfer of collateral to the right place at the right time as seamless and operationally simple as possible".

The collateral transfer arrangement between both companies ensures that their mutual clients achieve higher risk protection and manage their available assets more efficiently, while increasing their purchasing power.

Using this partnership, the first trade was carried out in Spain, and both companies are co-operating to extend the scope of the arrangement to the main European and Asian markets.

Operating in 80 nations through a workforce of 200,000 staff, BNP Paribas offers retail banking, investment banking and corporate & investment banking services to its customers.